August 20, 2017

Building Momentum…Another Good Expiration Cycle

Despite the surprising rally over the past week or so, all of our bear call spreads are going to close out the cycle worthless. And as most of us know, in the world of an options seller worthless is a wonderful thing. We only had a few spreads on during the month of October, but both made 17.6% for the cycle.

As I’ve been saying over the past several days, I want to add a spread or two for the November cycle but I wanted to wait until the BS in Washington passed. And now that the buffoonery has passed, I’m happy to say we’ve been left with a great opportunity.

Just look at the overbought/oversold indicator below. Almost everything is in an overbought state on a short-term basis. And even though volatility has been crushed (as seen in the VIX) over the past several days, the fear index still sits above the dreaded 12.50 mark. As long as it manages to float above that mark we are still able to bring in some decent premium while maintaining our high-probability requirements. So given the aforementioned, tomorrow should be a busy day.

A few of my favorites right now are EWY, EWG, XOP, IYR and yes, SPY. Subscribers stay tuned for several trade alerts.

10-17-2013 8-27-44 PM

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